Shell continues to retool its strategy after last year's merger with BG Group by leaving Saudi joint venture early. Photo by Oskari Porkka/Shutterstock
Royal Dutch Shell said its move to sell off its share in a petrochemical joint venture with a Saudi partner is part of its effort to retool its regional focus.
Shell sold its stake in a joint venture effort to Saudi Basic Industries Corp. for $820 million in a move that solidifies the Dutch supermajor's shifting priorities in the wake of last year's acquisition of BG Group.
The agreement marks the end of a joint venture agreement that was set to expire in 2020.
"This step will allow Shell to focus its downstream activities and make selective investments to support the growth of its global chemicals business," the Dutch supermajor said in the weekend announcement.
SABIC last week reported its full-year net profit in 2016 declined 4.6 percent. Net profit for the fourth quarter, however, was up nearly 48 percent in a sign of broad-based recovery in the energy sector.
"SABIC has performed admirably this year in the face of unusual market conditions and has the financial strength and robust strategy to take advantage of opportunities that emerge during economic uncertainty," SABIC CEO Yousef al-Benyan said in a statement.
Shell continues its evolution after last year's mega-merger with British energy company BG Group. The company already left oil and gas operations in up to 10 countries as it focused more heavily on gas-rich Australia and shale opportunities in the United States.
The Arab Petroleum Investment Corp., an offshoot of the Organization of Petroleum Exporting Countries, said in a report last week that Shell's shifting focus in the wake of the BG Group acquisition sent "mixed signals about its desired role in the region."